I know the answers (they are bold) im just unsure how to show the work for these
ID: 2504325 • Letter: I
Question
I know the answers (they are bold) im just unsure how to show the work for these problems
Use the following information for Questions 8 & 9
The Sasita Corporation manufactures two types of vacuum cleaners, the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 20X5 were as follows:
Static Budget ZENITH House-Helper Total
Number sold 5,000 20,000 25,000
Contribution margin $1,500,000 $3,000,000 $4,500,000
Actual Results ZENITH House-Helper Total
Number sold 4,000 28,000 32,000
Contribution margin $1,280,000 $3,920,000 $5,200,000
Prior to the beginning of the year, a consulting firm estimated the total volume for vacuum cleaners of the ZENITH and House-Helper category to be 250,000 units, but actual industry volume was 256,000 units.
Question 8
What is the total sales-volume variance in terms of the contribution margin?
Question 9
What is the total sales-quantity variance in terms of the contribution margin?
Explanation / Answer
8. total sales-volume variance = (Actual units sold x budgeted average unit contribution margin)-Budgeted contribution margin = 4000*300 + 28000*150 -4500000 = 5400000-4500000 = 900000
9. total sales-quantity variance = (actual Number sold - budgeted Number sold) * budgeted Contribution margin per unit = (32000 - 25000)*(4500000/25000) = 7000*4500/25 = 1260000
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